Is it safe to sell your property in a spring buyers' market?

It's fair to say that we are now in buyers' market territory. But even when auction clearance rates are low, most properties do still sell – it just isn't always under the hammer. Invariably, properties are sold in the hours, days or, very occasionally, weeks after the auction.
Virginia Star

by
Richard Wakelin

We may have only just passed the shortest day of the year, yet many estate agents are already plotting their spring campaigns for what is usually a bumper time for property sales.

Spring often heralds a doubling of auction numbers from the quiet Saturdays of July to the blockbuster weekends of October and November. But with auction clearance percentage rates now regularly sitting in the 50s or below in most capital cities, is this a cue for prospective vendors to sit out this year's spring market?

Naturally, many prospective vendors are nervous about listing because they fear their property won't sell. With auction clearance rates about as low as we have seen since the extraordinary pickup of the market in 2012, that's an understandable worry.

It's fair to say that we are now in buyers' market territory. But even when auction clearance rates are low, most properties do still sell – it just isn't always under the hammer. Invariably, properties are sold in the hours, days or, very occasionally, weeks after the auction.

Another reason to be sanguine about the likelihood of success is that prices are only a little off their peaks (down 4 per cent in Sydney over 12 months, down 1.2 per cent in Melbourne over three months). That is, in part, because there are fewer properties being listed compared with 12 months ago. According to CoreLogic, listings are down about 5 per cent in Brisbane and Melbourne and 12 per cent down in Sydney.

Advertisement

Related Quotes

But it does show that while demand for property has softened, it hasn't evaporated. In practical terms, this means that while many auctions may have delivered the vendor three or four bidders in 2017, they now typically only pull one or two bidders.

Faith in auctions

So don't use the lower auction clearance rates as a reason to shelve plans to sell a property. Indeed, if your property is of a type in your area where the auction method is generally used, I would persist with that approach (rather than opt for a private sale) even if there is a good chance of a pass in on the day.

Why my continued faith in auctions? Experience shows that a well-run auction campaign is unsurpassed at flushing out prospective buyers in a well-defined period of time. And should a property pass in, a good, experienced real estate agent knows how to obtain a quality outcome for their vendors in subsequent negotiations.

In a buyer's market, the key to vendor success is two-fold. First, select an estate agent for your campaign who is strong at marketing the property and at negotiation. The latter skill is the rarer of the two qualities, as it is usually only honed in tougher markets, rather than the sellers' market of the past six years. Second, inform yourself about what is fair value for your property in the current climate, based on recent sales of comparable properties.

Finding that star estate agent is tricky but not impossible. There are usually one or two in any one area. Use the "sold" section in property portals (such as Domain.com.au) to research recent campaigns in your area of properties similar to yours.

Shortlist the agents who win a disproportionate amount of listings and whose body of work shows a high standard of professionalism. Take soundings from your network. Then interview those two or three individuals and probe them about their estimate of your property's value and experience of and approach to pass-in negotiations.

The right agent will stand out – the one who demonstrates a realistic and evidence-backed estimate of value and who can show a track record and method to getting properties across the line.

Richard Wakelin is a founder of Wakelin Property Advisory, an independent buyer's agent specialising in acquiring residential property for investors.